Case Study
Roberta Melgarejo
MGT 608 Decision Systems for Managers
Summary
In 1995, a well known Hotel and Spa Resort in Izmir, Turkey started off as a family owned business and dramatically expanded 200% during a six-year period from 2000-2006. The responsibilities of purchasing services were handled directly by the related department receiving the services. Mr. and Mrs. Gunes, the owners of the hotel, decided to bring in a Purchasing Manager, Murat Var, to take over all the purchasing of services for the entire Hotel. Doing so centralized responsibilities and build strong customer-supplier relations and improved levels of customer service. The department managers felt this was a good decision, however they did have a few complaints and concerns. They felt purchasing personnel did not engage department heads in the source selection process and that sometimes that lead to wrong or bad selections.
Discussion Questions
1. What makes the procurement of services different from that of the purchase of goods and materials?
Strategic procurement of services is crucial for the success of Sunny Hotel/Spa & Wellness Resort. The flow of goods and materials supports service management, while the services flow is treated as a focal point that should be properly managed by outsourcing to service companies. The procurement team for services at the Sunny Hotel are focused on securing service contracts from different companies, negotiating the best prices and cost minimizing, building supplier and customer relations that are mutually beneficial. Re-evaluating the performance of the service provider to see if anything needs to be updated or changed should be done periodically. These steps can be timely and require significant time to really produce a solid system. Communication between department heads on service decisions is essential in the decision making process because gaining of services affects individual departments. Good, reliable and cost effective service relationships can
MGT 608 Decision Systems for Managers
Summary
In 1995, a well known Hotel and Spa Resort in Izmir, Turkey started off as a family owned business and dramatically expanded 200% during a six-year period from 2000-2006. The responsibilities of purchasing services were handled directly by the related department receiving the services. Mr. and Mrs. Gunes, the owners of the hotel, decided to bring in a Purchasing Manager, Murat Var, to take over all the purchasing of services for the entire Hotel. Doing so centralized responsibilities and build strong customer-supplier relations and improved levels of customer service. The department managers felt this was a good decision, however they did have a few complaints and concerns. They felt purchasing personnel did not engage department heads in the source selection process and that sometimes that lead to wrong or bad selections.
Discussion Questions
1. What makes the procurement of services different from that of the purchase of goods and materials?
Strategic procurement of services is crucial for the success of Sunny Hotel/Spa & Wellness Resort. The flow of goods and materials supports service management, while the services flow is treated as a focal point that should be properly managed by outsourcing to service companies. The procurement team for services at the Sunny Hotel are focused on securing service contracts from different companies, negotiating the best prices and cost minimizing, building supplier and customer relations that are mutually beneficial. Re-evaluating the performance of the service provider to see if anything needs to be updated or changed should be done periodically. These steps can be timely and require significant time to really produce a solid system. Communication between department heads on service decisions is essential in the decision making process because gaining of services affects individual departments. Good, reliable and cost effective service relationships can